Are you thinking about getting life insurance? Life insurance will give you the security of knowing that your loved ones will be cared for if anything unforeseen ever happens to you. The right life insurance policy will give you peace of mind. Unfortunately buying life insurance can be confusing with a variety of options, which can cause people to make mistakes in choosing the right policy.
There are many different types of life insurance policies and providers you can choose from, which can make deciding on the right one for your needs quite overwhelming. It can also make it easier to get locked into a bad policy. Getting a bit of an education on life insurance can help you avoid many of the mistakes that people make when they are buying a life insurance policy.
These are the top 5 life insurance mistakes that most people make:
1. Using Whole Life Insurance as Your Retirement Savings Plan
Many life insurance agents recommend whole life insurance as an investment vehicle for college savings or retirement planning. Unfortunately whole life insurance policies won’t give you a worthwhile return on your investment. You will actually be better off buying an inexpensive term-life insurance policy and investing the difference each month in a diversified portfolio of stocks,bonds or mutual funds.
2. Waiting Too Late in to Buy One
Ideally once you have a family that relies on you for financial support, you should buy life insurance. Unfortunately some people don't start to think of life insurance until they face a health issue or a near death experience. By that time getting a life insurance policy may not be possible or affordable. In addition, the older you are when you buy a policy, the more expensive it will be. Don't hesitate to buy life insurance if you know you need it.
3. Not Comparison Shopping First
There are many quality life insurance companies that you can choose from. Unfortunately some people simply walk into their local State Farm or Allstate office and buy a policy without shopping the price. Make sure to comparison shop before committing to a life insurance provider. You can use the handy comparison tool right below this blog post to instantly compare pricing from top providers.
4. Not Buying Enough Coverage
It is always best to buy a little more insurance than you think you will need, especially when you are still young. As you get older rates go up, so locking in an affordable rate at a younger age is more advantageous than buying additional coverage in the future.
Too many people underestimate the amount they will need or try to minimize their premiums by purchasing the smallest coverage amount possible. Make sure to consider all potential expenses that could arise if something were to happen to you, like paying off the mortgage, childcare expenses, and your children’s college education. Don’t forget to also make sure your family will have enough money for health coverage if this is something that is currently covered by you.
5. Not Working with an Independent Insurance Agent
The easiest and most cost-effective way to comparison shop for insurance is dealing with an independent agent. They have the ability to compare rates from multiple companies and can help you save money. They will make sure that you get the best deal possible, and in most cases they will provide you with better customer service.